ESG INTEGRATION

The world is changing. With it, the world of investing is changing.

MSCI ESG Research provides in-depth research, ratings and analysis of the environmental, social and governance-related business practices of thousands of companies worldwide. Through early warnings and timely updates, our critical insights can help investors uncover risks and opportunities that traditional investment research may not detect. With the help of our dedicated global team of consultants, our institutional investor clients use our research to implement their responsible investment objectives.

From natural resource scarcity to changing governance standards, from global workforce management to the evolving regulatory landscape, ESG factors can impact the long-term risk and return profile of investment portfolios. MSCI ESG Ratings help investors to understand ESG-driven risk and opportunities and integrate these factors into the portfolio construction and management process.

Our global team of 140 experienced research analysts assesses thousands of data points across 34 ESG issues, focusing on the intersection between a company’s core business and the industry issues that can create significant financial risks and opportunities for the company. Companies are rated on a AAA-CCC scale relative to the standards and performance of their industry peers.

To maintain our leading edge in research methodology, MSCI ESG Research regularly seeks feedback and opinions from external experts on specific ESG issue areas through the MSCI ESG Research Thought Leader Council. Read more about the Council and our recent panels here.

In addition to over 5,500 global equity issuers, MSCI ESG Ratings are also mapped to over 260,000 fixed income issuers. Read more

As long-term institutional investors, asset owners often look to managers to more fully assess governance-related risks. With the August 2014 acquisition of leading corporate governance research and analysis provider GMI Ratings, governance expertise is now integrated within MSCI’s global ESG team. Our analysts provide critical insight into timely corporate events, including analysis of potential governance concerns associated with high profile IPOs like Facebook and Alibaba.

MSCI’s unique corporate governance research process examines company events and corporate behavior as well as governance structure, providing data and analysis through MSCI ESG GovernanceMetrics, specifically:

Corporate governance can help identify risk associated with lax oversight, excessive pay, corporate misconduct and accounting irregularities. Through a combination of data, analysis, ratings and other tools, GovernanceMetrics is designed to enable institutional investors to both conduct bottom-up research on individual securities and to assess governance risk across an entire portfolio.

Many asset owners and managers are subject to guidelines that restrict investments or place thresholds on companies involved in certain lines of business, including federal and state sanctions on companies with operations in countries such as Sudan and Iran. Our screening research enables institutional investors to satisfy client investment guidelines, implement client mandates, and manage potential ESG portfolio risks.

We also offer a comprehensive suite of tools and solutions designed to help institutional investors understand portfolio exposure to carbon asset risk and implement fossil fuel exclusion, low carbon or thematic investment strategies.

Our ESG Research products and services are available on our integrated online platform, MSCI ESG Manager, and are also available on MSCI’s BarraOne and Barra Portfolio Manager platforms, as well as in FactSet and StyleResearch.

Our ESG Research ratings and data are used in the construction of the MSCI ESG Indexes. Our suite of equity and fixed income ESG Indexes representing some of the most prevalent ESG investing strategies are designed to help institutional investors more effectively benchmark ESG investment performance, issue index-based investment products, as well as manage, measure and report on ESG mandates.